February 20, 2013 / 6:06 PM / 5 years ago

EMERGING MARKETS-Latam currencies edge down on European woes

* Real falls 0.26 pct, tracking US stocks
    * Mexican peso dips 0.39, as European woes weigh

    By Alexandra Alper
    MEXICO CITY, Feb 20 (Reuters) - Latin American currencies
cooled on Wednesday morning as a strike in Greece and weak
Italian data renewed concerns of deep economic stagnation in the
euro zone and U.S. equities markets dipped. 
    Tens of thousands of Greeks took to the streets of Athens 
as part of a nationwide strike against austerity, while data
showed Italian industrial orders fell in December.
    Currencies tracked U.S. stocks lower as investors found few
reasons to buy equities following a rally. 
    "The news out of Europe rekindles ever-present themes of
insolvency in these nations," which dampens risk appetite,
Enrique Alvarez, an economist at IDEAglobal said. 
    The Brazilian real weakened 0.26 percent to trade at 1.9595
per dollar, a day after data showed unexpectedly poor retail
performance and the central bank hinted it was not ready to
raise rates to tackle inflation.  
    "You are still sort of lifting the curtain up on different
metrics related to where Brazil stood at the end of last year
and they are not good," said Alvarez.
    Data on Tuesday showed Brazilian retail sales fell
unexpectedly in December, as rising inflation began to erode the
consumer spending that kept Latin America's largest economy out
of recession for the past year. 
     Central Bank President Alexandre Tombini also on Tuesday
said the bank is ready to "adjust" monetary policy if needed,
but added inflation is not spiraling out of control, reinforcing
the view that the bank is not going to take any action just yet.
    Still, Alvarez said he expects the real could get as strong
as 1.90 per dollar in the next two to three months as the
central bank lets the currency appreciate.
    The Mexican peso fell 0.39 percent to trade at 12.6790 per
    Francisco Diez, managing director of emerging markets at RBC
 Capital Markets, said he expected the peso to still be trading
in the 12.60 to 12.72 range on Friday.

    Latin American FX prices at 17:11 GMT:
 Currencies                         daily   YTD %
                                        %  change
 Brazil real               1.9595   -0.26    4.11
 Mexico peso              12.6790   -0.39    1.46
 Chile peso               473.000   -0.23    1.21
 Colombia peso            1792.10   -0.08   -1.46
 Peru sol                  2.5820   -0.04   -1.20
 Argentina peso            5.0200   -0.15   -2.14

 Argentina peso            7.7900   -1.16  -12.97
0 : 0
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